I recently had two clients separately inquire about cryonics in their estate plan. Cryonics is the science of freezing a body to restore it when technology becomes available to do so. While I have had clients state they wish for their body to be donated to science, I had never before now had clients mention cryonics.
I had to suppress my initial reaction to discount the topic, and do some research. I found that there are roughly 154 patients with a company called Alcor Life Extension Foundation who have asked for their bodies to be preserved. As I understand it, at this time, there is not technology that would bring a person back, so to speak; however, some people have invested in the possibility. The cost to be preserved in Alcor is around $200,000 plus annual dues. There are other interesting scientific endeavors underway, such as using stem cells, nerve stimulation and other processes to try to regenerate brain function, and using cryonics to improve organ donation processes.
Then, I stumbled across discussion of “revival trusts” in estate planning, i.e., a client attempting to essentially hold onto their wealth in virtual perpetuity for potential revival of their body or brain. The literature contained recommendations on drafting such trusts to allow loved ones to limited use of the property while it is preserved, and rebutting certain legal challenges, which would most certainly take place if use of such trusts became common. To start, there are long-standing laws that prevent assets from being held in trust forever.
While the science behind preservation or revival sounds interesting, I found no credible information that we are even close to being able to bring a frozen body or mind back from the dead. Given that, I found the idea of drafting trusts for clients to preserve their wealth, for a thousand years, in hopes of holding onto it later, to be absurd. While loved ones and charities have no rights whatsoever to any inheritance, and I have always thought they should not feel entitled, it also seems mistaken for anyone to encourage a belief that one can hold onto their money forever. In sum, the skeptic in me prevailed, and I would currently recommend against clients considering cryonics or “revival trusts.”
As an attorney practicing in the area of trusts and estates, and probate litigation, I recently considered the most common reasons for disputes between siblings and grandchildren after the death of a parent who owns a business or family land – the parent’s unwillingness to leave the estate unequally.
Often, a simple will or trust dividing their estate equally between the kids on their death, or upon the death of a surviving spouse, is a common estate plan that works for most families. It does not work well, however, when that parent owns a business or family land, and where not all the children are working together on that business or using the land. For example, if dad has spent many years building a business, and one of three of his children are working in the business, but he leaves it, along with his entire estate, to all three children equally, then the child in the business is faced with a difficult situation upon dad’s death. He is suddenly partners with his siblings, who don’t work in the business, and has a fiduciary duty to act in their best interests when determining distributions, his own salary, the direction of the business, sale of assets, investments and more. It is rare that every sibling will think the sibling running the business is doing a perfect job. It is also rare that the working sibling will feel good sending 2/3 of his company’s profits out to his siblings for the rest of his life. That simple estate plan, for a business or landowner, inevitably causes life-long tensions or breakup of family relationships, even in the best of families. It also often causes sale of the business or land.
In that example, dad’s better option would have been to bravely leave the business to the son working it, and leave his cash accounts and primary residence, for example, to his other children. The ultimate value for each child may not be precisely equal, but ultimately everyone respects the estate plan and feels good about the gift they received because dad made the decision. It is also more fair for the child working the business to receive its upside, while the other children might really appreciate receiving the whole house or all the cash. It’s a win-win and most likely to avoid the breakup of the family and business.
Similarly, with family land, if the parent’s goal is to keep it in the family, then leaving it equally to all children is the worst option. From there, it will be left to multiple grandchildren who are cousins and only remotely connected to each other and the land. Inevitably, the land gets sold with the owners cannot agree on something. The better option in this example is that the parent leave that land to one person who really values it, and leave other assets to the other children.
Admittedly, it is difficult for any parent to decide to leave one asset to one child and another to another child, because we all love our children equally. But it does them a big favor and helps them have avoid estate disputes that hurt their relationships, so in my opinion is a good option for many parents with businesses or land. In any event, being specific, clear, and unambiguous in your estate plan is the best approach for every client.
Below are some instances when a child (age birth-21) might need an estate-planning document:
iWillandTrust.com, available to Colorado residents, is the only website where clients, including young adults, can create their estate plan online for a reasonable fee ($399) in about 30 minutes. Upon completion, the client will receive a phone call and advice from an attorney who customizes the documents and, within a couple days, sends them for the client’s signature. iWillandTrust.com is an invaluable resource for parents’ estate planning as well!
It's a common misconception -- you've completed your will and believe that all your assets will pass to those you have named in your will. You might be surprised to find out your will does not govern your retirement accounts, annuities, or life insurance. The beneficiary designation you signed years ago on those accounts governs them -- those companies are required to pay out that money on your death to those beneficiaries by contract, not those you have named in your will.
I have had clients surprised to learn who their named beneficiary is on a retirement account. Sometimes it's a sister, instead of their child. Sometimes it's an ex-spouse. Sometimes it's a child directly, even though the client has created a trust to hold their child's inheritance. I explain that if the child rather than the trust is the named beneficiary on an account for a life insurance policy, then on the parent's death, the child will receive the account at age 18 -- often a bad time in one's life to receive a large gift.
I always tell my clients to request their beneficiary designation change forms as part of their estate plans, and I advise them how to complete the forms so that they are consistent with their wills or trusts. Without this step an estate plan is incomplete.
Similarly, clients often don't realize that titling trumps their will. For example, in Colorado if you have about $70,000 in accounts in your individual name, then your sopuse will need to open a probate to have access to those accounts on your death. Having a will does not change that. This can be a real headache for a surviving spouse. If you have an account jointly titled with someone, it passes automatically to that person on your death. In sum, going over titling and beneficiary designations is an essential part of estate planning.
iWillandTrust.com is the only website where an estate planning attorney will provide advice on your titling and beneficiary designations, so that they correspond with your estate plan. Don't put it off; take 30-40 minutes today to use iWillandTrust.com.
Have you considered what would happen to your digital photos and videos in the event of your death? Have you provided some instructions for your executor on how to handle your Facebook or Twitter account? While most estate plans contain tools for fiduciaries to access financial assets, and healthcare information, few provide personal instructions on digital assets. Yours should.
Digital assets include things like your user names and passwords, email, electronic access to photos, data storage, phone data, stored music, bank account sign-ins, domains, and more. In 2016, Colorado enacted the Revised Uniform Fiduciary Access to Digital Assets Act (“RUFADAA”). It provides that you may “allow or prohibit in a will, trust, power of attorney, or other record, disclosure to a fiduciary of some or all of [your] digital assets, including the content of electronic communications sent or received by [you].” In other words, if you’ve given them written permission, your fiduciary (i.e., executor, agent on your power of attorney, trustee) can access your digital assets. According to the law, that power “overrides a contrary provision in a terms-of-service agreement that does not require the user to act affirmatively and distinctly from the user's assent to the terms of service.” So even if you’ve clicked “I agree” to 10 different online agreements, providing 10 different sets of rules and access on the death of a user, your designated fiduciary gets access to your digital assets under the law. This provision was needed because you’d have unwittingly signed, for example, a Yahoo user agreement that says your account will be disabled on your death, and a Google user agreement that says Google will decide whether a family member shall be granted access, and another user agreement that provides something else! While each user agreement varies, many were intended to protect your confidential information, which is a good thing, but in turn have caused headaches for family.
The RUFADAA goes on to say that if you’ve designated a fiduciary to access your digital assets, the custodian can either grant them full access or “partial access to the user's account sufficient to perform the tasks with which the fiduciary or designated recipient is charged.” That means even with your designation, your fiduciary might not be able to access everything you can. It also provides a host of proof the custodian may require for your fiduciary to access to your email after death. Finally, it reminds your fiduciary of his/her existing high duty of care, loyalty, and confidentiality with respect to your digital assets, as with any of your assets.
As a practitioner in Colorado, I have found the best way to provide for digital assets in your estate plan is two-part: (1) make sure your durable power of attorney and your will contain a paragraph explicitly granting access to your fiduciary over your digital assets, and (2) make sure you’ve left at least a few written instructions for your fiduciary on what they should do. As for the first point, the paragraph for your will or power of attorney is easy enough to ask your attorney to insert (any estate plan created for Colorado residents on iWillandTrust.com contains thorough paragraphs in your durable power of attorney and will or living trust, granting your fiduciary access to your digital assets). As for the second point, here’s an example of one person’s written instructions to a fiduciary: “In the event my spouse and I are deceased, please (a) copy all my photos from various storage locations onto a storage drive for each of my kids, (b) delete all my email except what could be needed for any existing lawsuits, (c) notify my Facebook friends of my death and then turn off my Facebook account, (d) transfer any domain names I own to my kids, and (e) here are a few important passwords…”
In sum, don’t delay designating a fiduciary in your will or living trust, and your durable power of attorney, to handle your digital assets and leaving them a few written instructions specific to your situation.
Create your estate plan today in just 30 minutes on iWillandTrust.com.
The United States Supreme Court ruled last month that where state law places married couples’ names on children’s birth certificates, a state cannot discriminate against same-sex couples by refusing to do so in their cases. Justices Gursuch, Alito, and Thomas dissented.
The challenge came from an Arkansas case, where a state judge had struck down part of that state’s law that discriminated against same-sex couples by requiring parents to be man and woman to list their names on their children’s birth certificate. The Arkansas Supreme Court reversed the state judge’s decision, and the U.S. Supreme Court reversed that decision. The high court reasoned that Arkansas law requires that where a couple is married, both spouses’ names go on a child’s birth certificate automatically, whether or not the husband is actually the father of the child, and whether or not the couple used a sperm donor and artificial insemination. Therefore, the Court ruled, the same rules must be applied to LGBT married couples. Otherwise, the state’s rules would conflict with the Court’s 2015 Obergefell v. Hodges ruling, prohibiting discrimination against LGBT couples in marriage. For example, the Arkansas Supreme Court interpretation meant a lesbian married couple who has used artificial insemination to have children, were not able to list both names on their child’s birth certificate the way a heterosexual couple could. This leads to one spouse/parent not be considered the legal parent of their child with schools, hospitals, insurance, divorce, and in many other important arenas, or else they must go through a lengthy, expensive, and uncertain adoption proceeding of the child.
In Colorado, similarly, the law presumes that the spouse of the person who gives birth is automatically the parent of the child. So in Colorado, since the Obergefell decision, LGBT married couples have finally been able to list both their names on their children’s birth certificates without need for costly and intrusive adoption proceedings, which LGBT couples had to do during the years before the decision. Not to mention, LGBT couples can finally enjoy the institution of marriage, without worry that their marriage won’t be recognized in one state or another. Prohibiting discrimination against same-sex couples in marriage is a good thing – like Obergefell, the High Court got this decision right.
iWillandTrust.com is the first attorney estate planning site, meaning an estate planning attorney with experience planning for the LGBT community customizes your documents.
Your will names the people you choose as guardian, or caretaker, over your minor children in the unlikely event of death of both parents.
Choosing a guardian is another decision that is very hard to make. This is normal – no one can imagine someone else raising their kids in the event of death of both parents. The thought alone is painful and frightening. But in the event such a disaster strikes, having done nothing, once again, is the worst option. A court would appoint guardian of your children, and it could be the most vocal person, including someone you would not have chosen. It could be someone who has a very different parenting philosophy than you. It could be somewhere where your kids aren’t happy. Your children would live with your guardian, and your guardian would receive some or all of your assets in order to care for your children. As BabyCenter.com reported in August 2016:
“For parents, making a will is the single most important thing you can do to make sure your child is cared for by the people you would choose if anything should happen to you. In your will you can designate a person (guardian) to care for your children if you die before they become legal adults. And you can designate a [trustee] to manage your money for your children until they reach adulthood.”
The roles of trustee and guardian can be filled by the same person, or different people. If you choose the same person, keep in mind your trustee would be writing checks to herself, as guardian, for groceries and other items to care for your kids.
It is very unlikely both parents will die and a guardian will be needed. But don’t put off naming a guardian, because the worst result would be the appointment of someone you would not have chosen. Name a guardian for your kids today by creating your online will today at iWillandTrust.com. It takes just 30 minutes, click “Begin” below now.
The Challenge For Estate Attorneys is Getting People to Take ActionApril 7, 2017, by Kathleen Lavine, Denver Business Journal
Despite the changes in technology that make the process easy, many citizens with ordinary incomes and typical net worth do not have a will.
The consequences of not having a document that specifies how assets should be distributed to heirs can be devastating for survivors. The state will often administer the remains without knowing the deceased’s wishes.
“Now more than ever it’s easy to get a will or basic estate planning documents done but statistics show traditionally 60-70 percent of Americans don’t have a will or document in place,” said Griffin Bridgers, an associate at the Denver law firm Spencer Fane specializing in tax and estate planning.
Bridgers knows from personal experience the trauma that stems from a premature death in a company and little planning ahead of time. It’s important for individuals and especially for businesses to make specific plans to deal with the changes that affect family members and employees.
Shelley Thompson, a shareholder and estates, trust and probate litigation attorney at Burns Figa and Will, said the widespread misunderstanding about estate planning prompted the firm to create a website to help clients with technology tools to aid in the planning process.
The firm’s new website, iwillandtrust.com, is the first online will planning website that engages an attorney to answer clients’ questions and make recommendations on wills and trust issues.
Besides providing accessibility, Thompson says that iwillandtrust.com, “services a market that wouldn’t otherwise engage in attorney…typically very small estates but that need a plan nonetheless.” Iwillandtrust.com services those who do not have a substantial trust or are too young to otherwise engage in an attorney.
Bruce Fowler, chair of Fairfield and Woods’ estate group, works with high net worth clients and faces a different set of issues in estate planning. One is the uncertainty of the federal estate tax, whether it’ll survive the current administration in the White House and Congress.
Fowler said if the estate tax is removed, ultimately much of the high net worth planning may become unnecessary, because most of the planning today is aimed at avoiding tax liability. While the estate tax currently remains in place, Fowler advises all clients that their current work may have to be redone if there’s a change in law.
Thompson said the adjustment in capital gains during the Obama administration has provided flexibility and has eliminated complications for mid-size clients. She doesn’t think that the Trump administration will remove the affordability provision for capital gains, but predicts inflation changes based on the increase in exemptions at the state level.
Bridgers and Fowler said the trend is toward more technology in estate and will planning. The new Revised Uniform Fiduciary Access to Digital Assets Act in Colorado is an important consideration because many people have online accounts such as social media or digital assets and the act makes it clear that the designated fiduciary can access the accounts of the deceased.
Colorado is one of the first states to pass the RUFADAA act. Fowler said it’s a trend in law that provides clarity for digital asset control, preventing the loss of online information.
Bridgers said the psychology of planning for death thwarts efforts to plan for the distribution of assets following death.
“(It’s) the core issue that holds people back, not the availability that holds people back…the challenge for any practitioner is how do you create a sense of urgency for their clients driven by age, wealth, death of a loved one. What would happen if I suffered the same fate? Am I prepared?” Websites that don’t distinguish all the necessary components of planning, or don’t involve an actual attorney throughout the legal process can give users additional legal headaches.
Fowler said so-called blended families can have complex estate documents, even in those with modest estates and can expect potential heirs to fight over ambiguities in a document, or items left out if there are complications or lack of clarity in the documents.
Another recent trend in high net worth client focuses on protecting children’s inheritances through trust arrangements.
Whether it’s through discussions with the children or other heirs to prepare them for a possibility for a large inheritance, giving them the training and skills prior to inheritance to know how to better manage their funds is crucial.
If you’re single or if your spouse dies, who would you trust to pay your bills, and takeover your checkbook, in the event you were unable? If married, most would choose your spouse to sign for you as agent on your durable power of attorney. But few couples have a durable power of attorney with someone named in second place, and few single people have a power of attorney at all. If you’re single, it’s essential to have a durable power of attorney, and if you’re married and one spouse dies, having that second-place person named becomes very important.
No one is immune from losing mental clarity that enables you to effectively pay your bills, manage your financial decisions, or decide who should be trusted to help. The agent on your durable power of attorney is empowered to sign your name; therefore, it is a powerful position and should be someone you trust. But the person you name would become your fiduciary -- meaning if called to serve, that person would be obligated to act in your best financial interest at all times. So it is better to name someone, and in the case of married couples, agree on who should be named as your second-place fiduciary. Not having an executed power of attorney can lead to a court appointing someone other than the person you would choose to handle your affairs if you cannot. Therefore, doing nothing is the worst option!
Name your fiduciaries – those you trust – today in just 30 minutes by using iWillandTrust.com. Your package will include your attorney-customized durable power of attorney, healthcare power of attorney, living will, will or trust, and other documents you need. Click “Begin” below now.
NBC News reported on June 27, 2016 that the Minnesota judge in Prince’s estate case said the case was heading into “uncharted waters,” in part because Prince had no will or living trust. In November 2016, it was reported that to date the lawyers involved in administering Prince’s estate have incurred fees of $2.3 million in just the first few months of administration!! Attorneys’ fees are always more, even in small estates, where there is no estate planning in place.
Even worse than the attorneys’ fees, Prince was a very private person who kept great control over his unpublished music. Yet having no will or living trust means his music will be sold to the highest bidder and therefore controlled by someone he didn’t choose. This is too bad as it is exactly what Prince would NOT have wanted!
Some think Prince might have trusted Jay Z with publishing his music, given that he gave Jay Z’s Roc Nation the rights to stream at least one album on Tidal streaming service in 2015. Prince made that deal with Jay Z because he thought the streaming service was innovative and wanted to support it. But no one can say whether or not Prince would have entrusted all his music with Jay Z, or with anyone else, because he had no will or living trust. If Prince did want Jay Z to be able to stream his music, he would be saddened his estate is now suing Jay Z’s company for streaming more music than they say he had written permission from Prince to stream.
Prince, while very wealthy, had one thing in common with many Americans – he put off his estate planning. Like many of us, no doubt Prince felt frozen when he tried to think of someone he trusted to take possession of his beloved and private music, or to whom he would entrust those decisions, or who would inherit his millions, being unmarried with no children. Just like Prince, while everyone knows they need an estate plan, many people feel frozen when they think about to whom they would leave their assets, whom they trust to handle their estate, and whom they would trust with their power of attorney. Being frozen means doing nothing.
But just like Prince’s case, doing no estate planning can produce the worst possible result in anyone’s case. Prince’s music will likely end up with someone he would have NOT wanted to have it; and his estate is being administered by someone he did not choose. Various people are stepping up to say they are entitled to inherit his fortune; whereas, there were no doubt certain people or charities he would have liked to give money to.
Learn from Prince’s case, affordably create your wills or living trusts today, using an attorney but in just 30 minutes, using the only site of its kind, iWillandTrust.com. Click “Begin” below now!
In Colorado, having a durable power of attorney and healthcare power of attorney can help avoid a court-appointed guardian or conservator you have not chosen.
Use iWillandTrust.com today to create your durable power of attorney and healthcare power of attorney. For an interesting interview about a case that demonstrates why estate planning is important in avoiding a court-appointed guardian or conservator, check out this NPR article: http://www.npr.org/templates/story/story.php?storyId=5697280